The crucial role of non-profit financial management

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Inyathelo FD Soraya Joonas says non-profit reporting needs to go beyond a tick-box exercise.

At a recent staff meeting, I was reminded that it has been 15 years since my tenure began at Inyathelo, a non-profit organisation that contributes to skills development and research that underpins sustainable organisations in civil society.

In those 15 years, I have witnessed changes in the sector, and specifically in the discipline of non-profit financial management. Conversations have evolved and flourished around the need for financial sustainability. Silos have been somewhat diminished, where ideas are welcomed and even encouraged amongst finance teams much more than before.

The field of non-profit financial management has found its place and become rightly integral to programming and capacity-building in intermediary organisations. Rather than the dismissive view of the financial backbone of an organisation being diminished to ‘back office’ it is properly recognised in the sector today for its crucial role in planning, building and reporting.

As a result, finance directors are now invited to the leadership table, the boardroom and various forums to share information and experience, and to obtain industry knowledge applicable to their work.

Over the past year, Inyathelo’s finance unit has been actively involved in financial sustainability and budgeting training and advisory services based on the unit’s solid experience in the field over the past 15 years. There has been an increasing demand for financial governance as organisations strive for increased accountability, efficiency, and the need to not only demonstrate, but live, the values of financial ethics.

When I first started in the sector, reserve funds and profit-making were often questioned, and the notion of making a surplus was often frowned upon. Today, the narrative has been flipped on its head and social entrepreneurial models that were implemented when Inyathelo opened its doors, are now widely understood and adopted throughout the sector. This contributes towards a fair degree of self-reliance and, ultimately, financial sustainability.

Donors and supporters have evolved more and more into engaging in mutual partnerships with their non-profit counterparts, working together towards a common mission.
However, while this progress is notable, there is still much work to be done. Ongoing trust-building between grantmakers and grantseekers must be prioritised. The ongoing common theme of ‘shifting the power’ needs to be actionable, with trust in those who have hands-on experience and exposure in understanding the complex nexus between need and impact, and the trajectory and time that this takes.

Measurement and reporting on investment success needs to move beyond a tick-box exercise that is outside the reality of long-term sustainable change, to finally care, really care, about non-profit entities’ viability and longer-term sustainability. In this way, non-profits can breathe, expand, explore and take measured risks to innovate in solving the problems they are established to seek answers to.

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